Budget 2018 – Personal Allowances Increase

Posted on 31st October 2018

During the much anticipated Autumn Budget, we saw unprecedented spending by the Government and an ‘end to austerity’.

Good news for individuals as personal allowances for income tax were increased from £11,850 to £12,500 before any income tax will become due. Chancellor Philip Hammond also announced that the threshold at which you pay a higher rate of income tax will rise from £46,350 to £50,000.

The announcement in yesterday’s Budget means most taxpayers will be able to earn £12,500 before they pay a penny of income tax from the start of the next tax year.

What does this change actually mean for taxpayers?

Generally speaking, it means money in your pocket – but how much?

• The change to the personal allowance will mean an extra £130 in your pocket if you’re a basic-rate taxpayer, earning between £12,500 and £50,000.
• As well as raising the personal allowance, the higher rate – the point at which most people start paying 40% tax – will be raised from £46,350 to £50,000. This will give somebody earning £50,000 a year an extra £860 a year: an additional £760 from their income between £46,350 and £50,000, as well as the £130 from their personal allowance.

If you need to file a self-assessment tax return, Avanti can help you, with a pick ‘n mix of services, you can choose services to suit your circumstances and budget (08000) 388 799

Share this post:

Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

I wish to hear about the latest news, events and tax and accountancy changes from Avanti Tax Accountants by email.

By clicking ‘Send Enquiry’ you agree to receive contact from Avanti Tax Accountants using the details given above. We respect your personal information and your privacy and will not share or sell your information to other organisations.
Please read our Privacy Policy for more information.